Identify Your Sector
The demand for high-performance design is growing significantly. The commercial green market is expected to increase annually by 18%, reaching nearly $82M by 2015, because more and more developers and tenants alike are seeing the value provided. The most recent research shows that green building need not cost more and could actually cost less than conventional construction, while the added value can be significant. This growth presents an extraordinary opportunity for the multifamily residential sector, typically underserved by high-performance design, representing only about 2% of the green building market. But the green housing market has grown sixfold over the past five years, so it represents a larger and large portion of the overall market.
In the residential rental market, a key priority is to increase lease renewal rates, in order to avoid lost rent and costs associated with changing tenants. Our research with clients shows that tenants are 90% more likely to renew their leases if they know 2-3 people in the building. Smart design can encourage interaction with neighbors by creating inviting interior and exterior common areas filled with natural light, fresh air, and plantings, all of which can lower resource use and operating costs while attracting people and encouraging socialization. For example, residents of buildings with “more trees and grass” know their neighbors better, socialize with them more often, have stronger feelings of community, and feel safer, while lush landscaping with large shade trees also reportedly adds an average of 7% to rental rates.
For tenants, high-performance residential design also improves indoor air quality, creating healthier spaces by eliminating or minimizing airborne pollutants, and relying more on natural light and fresh air also can reduce dependence on mechanical and electrical systems, saving energy and utility costs, typically by 20-30% and often as much as 60%. The combined savings for multifamily residential has been estimated to be $3.4 billion in the US. So residents can become healthier and wealthier at the same time.
In sum, benefits of green residential design can include higher rents, renewals rates, occupancy rates, and market value, lower energy consumption and operating costs, healthier interiors, happier tenants, and stronger communities.